Serious Discussion About The New Plan

[mweiss]

I figured based on recent discussions around here that there's a willingness to discuss the new plan, albeit without the rhetoric. I'm all in favor of this; I'd like to know more about it, and how everyone feels about it.

Obviously nobody wants a paycut, and everyone who would be paid less will argue why they should not be paid less. That's old news, and we've all heard it many times before, so let's try to keep that out of this thread and talk about the new stuff.

Here's my understanding as to the other components of the plan:

• Convert PIT to a focus city
• Increase point-to-point flying along the eastern seaboard
• Roll the PHL hub
• Increase CLT banks to the point where the effect is similar to a rolled hub
• Increase international flying from PHL and CLT
• Increase MAA flying (as a replacement for US mainline? Does anyone know if this is a formal part of the plan?)
• Consolidate facilities (e.g., res and training in and around CLT)
• Consolidate management, reducing headcount and overhead

Aside from MAA, which sure looks and quacks like an end-run duck, I have a hard time finding major flaws in these.

I do think the idea of moving res to the agents' homes is fabulous on several levels, and it would be far better than paying to move agents from PIT to CLT, but that's pretty much it for my complaints.

What do the rest of you think? And can this plan save enough money that further wage/benefit cuts won't be necessary?

 

[PITbull]

FACT:

The major part of the employee piece of concessions is major layoffs that will be induced as a consequence of these proposals across the board...f/as, pilots, agents, mechanic and related.

 

[autofixer]

What is the plan? Is it in writing some place? Each and every one of the bullit points above could have (and should have) been instituted at any time in the last 15 years. No plan is required to put these cost saving measures in place now (or yesterday)! If management wishes to couple these measures with more concessions, they face possible failure. The rolling hubs and more point to point flying should be instituted independantly of concessions. Of course, this is predicated on believing UAIR management is interested in running an airline...a big IF!

 

[28yrsnojob]

There is no plan but layoffs and pay cuts and reduce the size of the airline...

 

[Harry Callahan]

THE CONCESSION IS CLOSED.
Get it.

 

[mweiss]

So much for minimizing rhetoric.

 

[cavalier]

So much for minimizing rhetoric.

I knew you would catch on after your eyes straighten out and you slid your glasses up. Those college journals will make a man blind.

Here’s something your journals don’t teach:

Never be afraid to try something new.
Remember that a lone amateur built the ark.
A large group of professional built the Titanic

 

[Reservation Agent]

CWA Concession stand closed....We already gave and gave and gave...
We already gave up: pensions, pay, holidays, 25% cash on vacation pay, higher medical premiums, etc....

******** How much are all the managers going to give to the company for its survival ??????? **************

If they can match what we gave up in dollars and cents....then we can talk...

Adios!

 

[E-TRONS]

Everyone continues to pound their chest while chanting the concession stand is closed.....that's what you think .

One way or another, these UAIR swindlers will get what they want (not need) thru their well demonstrated methods of fear mongering, extortion and outright robbery ultimately with the help of a revisit to BK....and we are not talking about Burger King here.

So do yourselves a favor and plan your alternate now!!

I am in NO WAY promoting giving into anything management asks for. I'm a NO all the way but that doesn't mean that they will not get money from me. Get it???

Denial is a terrible state to be spinning around in......for Pete's sake....PULL UP ALREADY!!!

 

[Reservation Agent]

Can you say..."Eastern Airlines"...

 

[mweiss]

Here’s something your journals don’t teach:

Never be afraid to try something new.
Remember that a lone amateur built the ark.
A large group of professional built the Titanic

You're a funny guy. Since you never read the things I read, you don't have the slightest clue what I have been reading. Nor do you know who I have been talking to. Nor do you know what I've talked to them about.

Suffice it to say that your three "truisms" are just one of the many, many things covered. Business schools produce more than just Kenneth Lays.

 

[dbcwaar]

Can someone tell me how US expects to build up further DCA/BOS/LGA when they need slots and slot exemptions to do this? How are they going to building their Core business around the shuttle, that looses money left and right? In DCA they can't even secure a beyond perimeter exemption over AS or HP!!!

Further neither PIT or CLT has ever had enough local traffic to support a hub. Also the idea of flying point to point. Didn't they do that pre 9/11 and never made money at it? As for all the Caribbean flying isn't this a rather short term fix? Yield are bound to start to fall soon, as everybody is adding ASMs and LCC like B6, F9 and NK have applied for permission to fly to many of these destinations.

Any thoughts on this?

 

[USA320Pilot]

Mweiss:

I applaud your efforts to have a constructive discussion on the merits of the new business plan and every post was chest pounding.

Nobody has offered constructive debate and the plan will be eliminated or the company will fail. Therefore, chest pounding is really a waste of time because it will not effect the restructuring outcome.

Meanwhile, to get back to your topic there are other positive corporate aspects and the framework of management’s “Transformation Planâ€, which is designed to make US Airways truly competitive in today’s rapidly changing industry.

The company’s goal is to lower units costs from about 10 to 6 cents per available seat mile (excluding fuel), which is going to be accomplished in two basic areas. Two cents of the four-cent reduction will come from operating more efficiently with better aircraft utilization, seat configuration, scheduling, and lower distribution costs. The company plans on rolling the Philadelphia hub, using different Philadelphia runway patterns, increasing aircraft block hours from 10 to 11.5 hours per day with existing crews, reducing Pittsburgh service, and adding about 180 point-to-point flights per day from key Northeast airports in Boston, New York, Philadelphia, and Washington.

Key distribution cost reduction initiatives include increasing internet booking by 100%, reducing reservation sales agent call time from 5 to 3 minutes per call, adding more self service Kiosks, and installing boarding pass readers,

New domestic point-to-point flying is planned from US Airways’ key Northeast cities to larger domestic markets, which can support O&D traffic with higher yields and load factors.

The top ten U.S. domestic O&D markets in regard to revenue are New York, Washington, D.C., Chicago, Los Angeles, Dallas, Atlanta, San Francisco, Boston, Denver, and Houston. Interestingly, Philadelphia is number twelve, Charlotte is number fifteen, and Pittsburgh is number sixteen. In addition, the company plans on operating flights from US Airways key Northeast cities to all key leisure markets with Low Cost Carrier (LCC) type aircraft turn times and utilization.

The plan envisions expanding European and Caribbean service, with potential new transatlantic routes from Philadelphia to Star Alliance hubs of Warsaw (LOT Polish Airlines), Vienna (Austrian Airlines), Oslo & Copenhagen (SAS Scandinavian Airlines), and Birmingham (BMI). Note - BMI’s main operational base is London’s Heathrow airport.

US Airways will maintain its Charlotte to London and Frankfurt flights and with 15 Philadelphia transatlantic flights in the summer, the company will have 19 widebody aircraft to support 17 flights (9 A330s and 10 B767s).

There will be further new Caribbean routes; as well as new service to Nicaragua, Honduras, and Panama, and possibly to San Salvador and Guatemala City.

Other changes include a high density B757 seat configuration reducing First Class from 24 to 8 seats, reducing the size of the A321 first class cabin, possibly changing the entire fleet to a single class service for domestic operations, and adding a new and very competitive In-flight Entertainment (IFE) system.

The changes above are designed to reduce the CASM by about two cents, with the other two cents will come from new labor contracts, across-the-board, for all work groups.

Siegel compared US Airways’ situation to that of two other network carriers who faced the entrance of low fare king Southwest Airlines into their principal hub: TWA and America West. In the case of TWA they were successful at lowering their unit costs, but they lost their passenger base in the process and ultimately failed. America West changed its product much in the same way the Transformation Plan proposes and now has become a successful airline, who recently had its credit rating raised during a period of deteriorating industry fundamentals.

From a fleet plan perspective, US Airways and America West have similar mainline fleets with B737s, A320 family, and B757 aircraft plus 50 and 70-seat RJs. US Airways does have additional aircraft strengths with the EMB-170, A321, B767, and A330 aircraft. US Airways’ fleet plan will increase CASM with multiple aircraft types, however, these aircraft will provide a higher RASM and more profits. The plan envisions growing the mainline fleet to 320 aircraft.

Other plan benefits are:

 Facility rationalization to lower unit costs such as Training, Reservation, CTO, a reduction of airport gates to lower unit costs. This will permit fewer gates and less ground equipment.

 The key is reducing distribution costs with IT improvements and productivity, which will lower unit costs so the company can simplify the fares to LCC levels and make money.

 More effective use of E-Commerce and use of automation.

Therefore, since US Airways’ new business model will emulate America West and especially since new chief executive officer Bruce Lakefield has compared our future to the contracts of America West (hub-and-spoke) and JetBlue (point-to-point), I believe we have just seen what the company’s idea of labors participation in the new business plan. Thus, this week I believe we can expect management to seek contracts similar in scope to the Phoenix-based airline’s labor costs, across-the-board for all Collective Bargaining Agreements.

Without these changes the plan will fail, therefore, ALPA knows the employee cuts are coming one way or another. Either they will come by consensual agreements or be court ordered, and if the cuts do not come, the airline will be liquidated to protect RSA’s investment.

Respectfully,

USA320Pilot

 

[PITbull]

USA320,

The airline will be liquidated and assets to be distributed toward the ATSB to protect the TAX PAYERS. The ATSB loan will be paid FIRST. Bronner's RSA investment will go down the poop shoot upon liquidation.

 

[USA320Pilot]

Just one more point…

I briefly skimmed through the posts in this topic and every one had the same emotional chest pounding sentiment. Management has said layoffs will occur and that is something that labor cannot stop. They are going to occur and will be subject to new labor accords.

Union Negotiators have the ability to eliminate and reduce furloughs dependent upon other contract changes, which is a key objective for the pilot group. I would be surprised given the demographics, age 60 retirements. LTD/medical problem, and expanded flying to see pilots furloughed, but dependent on how the new business plan unfolds it definitely is a possibility.

Therefore, if furloughs are going to occur, I believe it’s in everybody’s best interest to cut the best deal possible and help the furloughees as much as possible. How do you do this? Keep the company in business as a viable on-going business enterprise.

Again, for those who are angry and would rather see the company “burn to the groundâ€￾ instead of accepting an America West type of contract, I believe Dave Siegel made a valid point during his webcast. He went so far as to encourage employees to leave the company if new work contracts aren't agreeable, rather than to fight the change. "If it doesn't work, I'd encourage you to support the change, and then go on and find something else," he said. "It's better to have a job when you're trying to find another job."

Moreover, even if a person loses their job over the new labor accords they will be better off if the company survives. With the company in operation a furloughed employee would receive severance pay, unemployment, COBRA medical insurance, recall rights, pass privileges, MDA/J4J opportunities (some employees), and recall rights.

But if US Airways fragments or liquidates what do furloughees receive? Nothing except unemployment and possibly other government aid. After all the emotion and chest pounding, even if there are layoffs, the person who leaves active employment is better off with a successful “Transformation Planâ€￾ that a failed company.

Respectfully,

USA320Pilot